November 04, 2015 | Grain Hedge Insights | Kevin McNew | Views: 233
November 04, 2015 | Grain Hedge Insights | Cody Bills | Views: 217

Soybeans Find Support in the Overnight

On Tuesday, Informa came out with its latest estimates for 2015 US corn and bean production. Both estimates were higher than USDA’s October forecast

Grains were mixed overnight as soybeans found modest support while corn and wheat lost ground from Tuesday’s close. Oil added on to Tuesday’s gains, surpassing $48 a barrel while S&P futures also moved into positive territory.

 

On Tuesday, Informa came out with its latest estimates for 2015 US corn and bean production. Both estimates were higher than USDA’s October forecast as the private analyst firm looks for 170 bushel corn yields and 47.9 soybean yields. This compares to 168 and 47.2, respectively, by USDA in October. Overall production is pegged at 13,718 MB for corn and 3,952 MB for soybeans by Informa and up from USDA’s October estimates of 13,555 MB and 3,888 MB. The next USDA WASDE report is Tuesday, November 10th.

 

In overnight news, Australia is getting heavy rains on its eastern wheat crop, which has traders concerned about quality deterioration as it nears harvest.  Up to 50% of the crop could potentially be impacted. In tender news, US got a rare new deal with the Taiwan Sugar Corp which announced it purchased 23,000 MT of US corn and 12,000 MT of US soybeans.

 

US spot basis levels continue to increase with harvest nearing completion and farmers holding tight to supplies. Both ADM and Green Plains CEOs said that they are seeing substantially lower farmer sales than normal for this time of year. US average corn basis is up 7 cents a bushel in the past two weeks, and should continue to rise steadily over the remainder of the calendar year baring a big rally in futures.

 

S&P (ESZ5) futures got above the pivotal 2,100 mark for the first time since July 20th, and has now completely erased the losses after China’s meltdown in late summer. Investors will look to Fed Chief Janet Yellen for clues to the next interest-rate rise as she is scheduled to give a speech today. Also, a report on private-sector employment will be released ahead of the opening bell, offering a fresh sense of the jobs environment ahead of the closely watched nonfarm-payrolls report due Friday.

 

Crude oil continued its move higher overnight following Tuesday’s impressive 3.8% gain. Gains were tied to a 6% jump in gasoline prices and a strike in Brazil that cut around half a million barrels of output in the first 24 hours and has slowed state-run Petrobras' daily oil output by around 25 percent. EIA will release new inventory data today, with traders looking for a buildup in stocks by 2.8 million barrels.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

November 03, 2015 | Grain Hedge Insights | Kevin McNew | Views: 303

Corn Basis Continues to Rally

After rallying this morning and in the overnight beans took a dive lower to close the day. Informa numbers were also released today.

November 03, 2015 | Grain Hedge Insights | Cody Bills | Views: 198

Grains Continue to Drift Lower

EIA report due out tomorrow.

Grains continued to drift lower overnight, while stock futures gave up some on Monday’s gains and crude oil reversed its selloff from the previous trade session.

 

In soybeans, Jan 16 bean futures drifted down to $8.76 pushing lower for a second consecutive trade session. Improving rains over the weekend in Brazil helped alleviate fears of dryness as planting season is in full swing there. On Monday, USDA reported yet another flash sale of soybeans to China for 120,000 MT. Also, USDA’s weekly export inspections came in at 2.5 MMT, well above trade expectations of 1.9 to 2.3 MMT.

 

For corn and wheat, export business continues to be lackluster. Monday’s USDA report showed corn exports at only 447,000 MT, below trade expectations of 475- to 625,000 MT and wheat was at a paltry 170,900 versus 275- to 400,000 MT expected.

 

Weather in Ukraine and Russia continues to show little signs of improvement for the wheat crop there. Russian Agriculture Minister Alexander Tkachev says 25% of the country’s winter crops are in poor condition as planting nears completion. In Ukraine, almost a third of winter wheat was weak and thinned, according to data from UkrAgroConsult. That’s comparable to conditions in 2011, which resulted in a 29% drop in output.  Most of Ukraine and western Russia received less than 80%, and in some cases less than 20% of normal rainfall in the 90 days through Oct. 31.

 

S&P futures (ESZ5) were lower following Monday’s solid advance. Earnings reports this week from Time Warner Inc., Allergan Plc and Facebook Inc. are among more than 100 S&P 500 companies releasing results this week.

 

Crude oil futures (GCLZ5 / QMZ5) rose slightly overnight. An Energy Information Administration report Wednesday will probably show inventories rose for a sixth week. While the supply glut continues to be an issue, a mild start to the US winter has traders looking for soft demand in the form of heating oil.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

November 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 234
November 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 239

Grain Hedge Overnight Highlights

Grains were mostly quiet overnight with little news or volatility to change prices.

Grains were mostly quiet overnight with little news or volatility to change prices. In outside markets, S&P futures were fractionally higher while crude oil dipped in early trade.

 

For soybeans, there was mild support to start the week from planting delays in Brazil. Soybean planting in Brazil remained behind the historical average even after isolated rainfall hit the mid-section of the country. Planting in Brazil stands at 31% compared to the 42% five-year average and 20% last week.

 

For wheat, Ukraine continues to struggle with dry conditions for the winter wheat crop. A senior weather forecaster there said the driest winter in 50 years could potentially lead to a 20% reduction in wheat output.  In other wheat news, Japan is seeking to buy food quality wheat in its normal tender to the US, Canada and Australia with the deals expected to be announced on Thursday.

 

In outside markets, Asia sold off overnight as slow Chinese factory data took its toll. S&P futures (ESZ5) had been lower overnight but managed to fight its way back to positive territory heading into the morning opening bell. The US dollar index (DX-MZ5) was slightly weaker as well in overnight trade, but still remains up 3.2% in the last two weeks.

 

Oil prices (GCLZ5 / QMZ5) fell on Monday as weak Chinese economic data fueled concerns about demand slowing in one of the world's largest oil-consuming nations, while record-high production in Russia exacerbated the global supply glut. China's factory activity fell for an eighth straight month in October, a survey showed, pointing at continued sluggishness in the world's second-largest economy. The global oil supply glut, which has more than halved oil prices since a peak in June last year, was underscored on Monday when Russia reported that its October oil production hit a post-Soviet record of 10.78 million barrels per day.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

October 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 260
October 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 216

Weekly Cash Comments

Weekly Cash Commentary for week ending 10/30/2015

Grain basis got a big boost this week as harvest nears completion and barge rates continue to sink lower. On the week, US average corn basis was up 3 cents a bushel while soybeans advanced 4 cents a bushel.

 

River terminals were big gainers this week as barge freight costs continued to come down. On the week, barge rates along the IL River slipped 8 cents a bushel and are off nearly 40 cents a bushel from their seasonal high set back at the end of September. As a result, corn basis along the river terminals climbed 8 cents a bushel, while soybeans was up nearly 7 cents a bushel.

 

Harvest for corn and beans is reaching the final stages, with corn in the Upper Midwest still left to cut. Areas of MN & WI saw little strength this week as harvest pressure still exerts some localized pressure in these areas. Likewise, bean cutting is causing some pressure in the Upper Midwest and the Mid-Atlantic as double crop beans get cut there.

 

For end users, corn plants were up a robust 4 cents a bushel on average as a group. In Ohio, 4 of the 7 corn plants there had better than 10 cent basis advances on the week. For soy plants, basis levels were solidly higher as end users bid up from the harvest lows. Gains on average were 6 cents a bushel for soy crush plants on the week.

 

Look for basis levels to continue to improve rapidly over the next 6 weeks as harvest wains and flat to lower futures prices keep farmers on the cash market sideline. 

 

The risk of trading futures, hedging and speculating can be substantial.  Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

October 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 210

Wheat Continues to Climb Higher

USDA’s weekly export sales report was for the first time above expectations for all three commodities.

Grains were higher overnight with wheat and soybeans posting the biggest gains of 4 cents a bushel, while corn was fractionally higher. In outside markets, crude oil & S&P futures were higher while the US dollar index was weaker.

 

Wheat continues to climb higher, taking out the 100-day moving average overnight. Weather concerns in Ukraine, Russia, and Australia continue to be supportive of wheat. After the close yesterday, Argentina’s wheat crop was pegged at 9.5 MMT by the exchange there, putting it below USDA’s latest forecast of 10.5 MMT and last year’s production of 11.75 MMT. In Australia, the wheat crop could face quality downgrades as parts of the country's eastern grain belt are forecast to receive heavy rains in the days ahead, potentially damaging the crop which is ready for harvest. Dry weather in September and above average temperatures this month have already curbed yields of high-protein Australian prime hard wheat in the world's fourth largest exporter of the grain.

USDA’s weekly export sales report was for the first time above expectations for all three commodities. However, corn continues significantly lag behind the pace needed to reach USDA’s annual forecast by 250 MB. Export business for US corn is expected to pick up as competition from South America wains in the coming months, but given the extent of the deficit, it seems likely USDA will need to lower their forecast for corn exports.

 

S&P futures (ESZ5) are closing in on the 2,100 mark, which would be a full recovery from the sell-off triggered by China’s weakness in August. A report on personal spending today will help investors assess the strength of the economy, as will a continuation of company earnings reports.

 

Crude futures (GCLZ5 / QMZ5) held steady overnight, poised to post the first weekly gain in three weeks despite a supply glut that has tested storage capacity and hammered company results. The potential gain, driven by smaller-than-expected builds in U.S. oil stocks, was widely viewed as a temporary boost in a market that is awash with oil and staring down sluggish economic growth in key markets such as the United States and China.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

October 29, 2015 | Grain Hedge Insights | Cody Bills | Views: 298

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